The ecommerce landscape is evolving dramatically ― consumer spend is continuing to shift online, Amazon is strengthening, digitally native vertical brands are rising, and traditional retailers are growing their digital presence while reevaluating the role of the store. This environment presents both opportunities and challenges for ecommerce companies that must have a differentiated value-proposition in order to survive.
Our Digital leaders and experts help ecommerce retailers plan, prioritize and implement the right initiatives that deliver profitable growth. We assist clients in areas such as strategic consumer segmentation and brand positioning, customer acquisition, merchandising strategy, pricing and promotions strategy, marketing mix evolution, M&A support, and much more.
Key questions and challenges
Our experienced professionals have a thorough understanding of the challenges facing ecommerce companies in the marketplace. We encourage our clients to ask themselves a few key questions:
- Do we have a comprehensive understanding of our target consumer? Which segments are most valuable? Do we understand how they behave, and what drives their decision-making? Do we understand what they think of us, whether we’re differentiated (and how), and why they do (or don’t) spend more with us?
- What is the overall digital health of our organization? How do we compare against our competitive set? Where do we have gaps to fill, or opportunities we can take advantage of?
- How do we drive traffic and brand engagement (e.g., search, digital advertising, social media, personalized emails, online communities that build consumer knowledge, brand awareness and customer loyalty)?
- How do we drive conversion (e.g., website design, ease of navigation, customer service, shipping costs and return policies)? How can we optimize our customer acquisition cost (CAC)?
- How do we optimize our pricing and promotional strategy to provide direct, sustained earnings improvement and build loyalty with our customers?
- What role, if any, should brick-and-mortar locations (e.g., full-line, showroom, pop-up) play in our channel strategy? How will they complement our existing ecommerce channel and align to the customer life cycle?
- Has our organization evolved along with today’s market to refocus resources on the most value-creating growth levers?
Examples of our work
To learn more about how we help clients create value in the ecommerce sector, please refer to these case examples:
- A leading online-only shoe and clothing retailer was seeking a deep understanding of their addressable consumer populations and the company’s share of wallet (SOW) with each group, to identify strategic opportunities to unlock additional consumer spend. L.E.K. segmented the population and analyzed shopping behaviors, selection criteria, and other factors to clarify the most important value proposition dimensions driving SOW, and defined several initiatives to achieve and/or further awareness, consideration, conversion, and loyalty among high and low SOW customers.
- A major ecommerce retailer specializing in custom-marketing materials for small and medium-size businesses and stationery for consumers, was looking to expand internationally. L.E.K. conducted an initial prioritization screen by evaluating the world’s largest countries against factors such as market dynamics (e.g., market size, growth potential, pricing, competition), channel and accessibility, consumer environment, and political/regulatory risks. We then conducted in-country research within deep-dive countries to understand local dynamics, product “fit” and brand appeal, purchase behavior, and estimated demand in each market. This culminated in a go-to-market plan by country that considered product and pricing strategy, channel and marketing strategy, and logistics and distribution.
- A major financial sponsor was evaluating acquisition targets in the online daily discount space. L.E.K. conducted commercial due diligence on several daily discount providers, providing an overview of the market and competitive landscape, and an in-depth assessment of the appeal of the daily deal proposition to consumers and merchants, the robustness of barriers to entry, and the ability of a combined Newco to take a leading market position. As a result of our work, the client had the confidence to move forward with several successful transactions.